How do you see the overall TCS results declared on 09 July?

For a long time now, TCS has been the bellwether of the IT space and this time again it has set the ball rolling announcing its results on 09 July. TCS reported 13.8% fall in net profits at Rs.7008 crore for the Jun-20 quarter. The markets were expecting a steeper cut in net profits due to the lag effect of COVID-19 globally, so that may be the good news.

But, TCS did manage to flatter on the top line front. Net revenues were marginally up by 0.4% at Rs.38,322 crore. The operating margins or EBIT margins continued to remain robust at 23.6%, although this is lower than its historic averages. In the past, TCS had managed to maintain a steady EBIT margin of above 25%, but that is understandable in these markets.

Despite being a tough quarter for the IT sector overall, TCS reported fresh deals during the quarter to the tune of $6.9 billion. This lays out a healthy sales pipeline for TCS in the coming quarters. Barring the life sciences and healthcare vertical, all the other verticals like BFSI and digital witnessed negative growth during the June quarter.